The KLT's (without straight axles--some models had those) did indeed have a real differential unit. I've never had mine apart but when I bought the rear end picked up a factory shop manual for it.
The bolt pattern on the hubs is four on 4" and it used a drum brake. A crafty person could easily convert it to a disc.
Not getting any younger I really need to get on the construction of a "cripple bike" for the next time I wang myself.
Ideally I probably need to set it up to replace the stock swingarm/rear wheel assembly so I can easily swap it in when I need it.